Determining which type of life insurance is right for you can be a challenge. For most people, especially students, convertible renewable term life insurance, which can be converted to a permanent policy and is renewable for up to twenty years, is the cheapest and best alternative. If your goal is income replacement, term insurance is relatively inexpensive, and this type of insurance has the most affordable coverage when life insurance is needed the most; it is possible to carry the coverage only for the amount of time that insurance is needed. Although term life insurance becomes more expensive with age, it may become less necessary as your other assets, such as your investment portfolio, grow, so your dependents would need fewer benefits from life insurance in the event of your death. However, when taxes or other liabilities are due at death, or when one desires to leave an estate, insurance may still be necessary.

Permanent insurance may be the best choice if you meet very specific criteria. If your goal is medical insurability (that is, you have a history of medical problems and you already have convertible term insurance), you can’t be denied life insurance should you decide to convert policies.

If the value of your assets is very great and you plan to leave an estate, and if you have estate-planning issues (i.e., you need to shield some of your assets), you should consider permanent insurance.

If your goal is retirement savings, and you have already invested substantial amounts of money in your tax-deferred retirement accounts and you have already invested the maximum in your tax-deferred accounts and annuities, you may want additional tax-deferred savings; consider permanent insurance as an additional investment vehicle.

If you are still unsure about what type of insurance is best for you, consider a renewable convertible term policy. This type of insurance provides the low cost of term insurance while giving you the ability to convert to a cash policy in the future (within a specific number of years).